Full text of DOI:10.1093/geront/41.2.180

The Gerontologist
Vol. 41, No. 2, 180–187
Copyright 2001 by The Gerontological Society of America
Patterns of Informal and Formal Caregiving
Among Elders With Private Long-Term
Care Insurance
Marc A. Cohen, PhD,1 Jessica Miller, MS,1 and Maurice Weinrobe, PhD2
Purpose: The purpose of this report is to provide basic de-
scriptive information on community-dwelling, disabled, pri-
vate long-term care (LTC) insurance policyholders who have
accessed policy benefits. We focus on how benefits are
used, whether claimants feel they are getting appropriate
value from their policies, and what the patterns are of formal
and informal service use. Design and Methods: Data
were obtained from a nationally representative sample of
693 LTC insurance claimants who were receiving benefits
while living in the community and 424 of their informal
caregivers. Eight of the largest LTC insurance companies
representing about 80% of the market participated in the
study. Results: LTC insurance benefits are well targeted;
they serve those truly dependent on ongoing care. The vast
majority of claimants are satisfied with their policies, under-
stand their coverage, and find it easy to file claims. Because
of their LTC benefits, substantial numbers of disabled elderly
individuals report that they are able to remain at home in-
stead of being forced to seek institutional care. The avail-
ability of LTC benefits reduces stress among informal
caregivers. For most claimants, formal care did not replace
informal caregiving. Implications: As the LTC insurance
market continues to grow and mature, there will be changes
in the profile of claimants, the service delivery system, and
the design of policies. Expansions in the private market will
be associated with a greater number of disabled elderly re-
maining in their homes with a maintenance of and en-
hanced resiliency of informal support networks.
The population of Americans who require or are
at risk of requiring help with personal care and other
daily functional tasks is growing rapidly. This is pri-
marily due to the growth rate of the elderly popula-
tion, especially those aged 85 and older. The percent-
age of elderly people requiring personal assistance
ranges from 8% of those aged 65 to 69 to well over
50% of those aged 85 and over (Spector, Fleishman,
Pezzin, & Spillman, 1998). Long-term care (LTC)
expenditures (i.e., expenses for nursing homes and
related facilities, in-home registered nurses and home
health aides, and other home- and community-based
services) now account for almost 12% of total per-
sonal health expenditures—a threefold increase since
1960. Among people aged 65 and older, LTC expen-
ditures account for 28% of personal health expendi-
tures (AARP, 1997).
Those elders who do require formal (paid) LTC
are likely to rely on out-of-pocket payments to fund
such care. Although Medicare pays 55% of the acute
medical expenditures of older Americans, its LTC
coverage is limited, covering just 20% of their LTC
expenditures (Feder, 1999). By contrast, out-of-pocket
spending represents only 14% of medical care expen-
ditures for elders, but it accounts for 28% of their
LTC costs. Medicaid finances a much greater share
of LTC services than acute care expenditures for per-
sons aged 65 and older (38% as compared to 4%;
Feder, 1999).
Exposure to catastrophic risks of this nature typi-
cally stimulates expanded public financing, a de-
mand for private insurance, or both. Over the past
decade, the potential for private LTC insurance to
become a significant source of financing for formal
LTC services has been much debated (Cohen, Tell,
Greenberg, & Wallack, 1987; Crown, Leutz, &
Capitman, 1992; Friedland, 1990; Meiners, 1984;
Mulvey & Stucki, 1998; Rivlin, Wiener, Hanley, &
Spence, 1988; Wiener, Hanley, & Illston, 1992;
Wiener, Tilly, & Goldenson, 2000). Even as the de-
bate continues, recent actions suggest that the federal
government may look to private insurance to help
address the LTC financing challenge. Private LTC in-
surance typically reimburses the costs of care pro-
Key Words: Chronic care service use, Home care, Long-
term care claimants
This research was funded by a contract from the U.S. Department of
Health and Human Services and a grant from the Robert Wood Johnson
Foundation Home Care Research Initiative. The views expressed in this
article are those of the authors and do not reflect the opinions of the fund-
ing agencies.
Address correspondence to Marc A. Cohen, PhD, LifePlans, Inc., 2
University Office Park, 51 Sawyer Road, Waltham, MA 02154. E-mail:
Mcohen@lifeplansinc.com
1LifePlans, Inc., and Center for Health and Long-Term Care Research,
Waltham, MA.
2Clark University, Worcester, MA.
180
The Gerontologist

vided in nursing homes and assisted living facilities
as well as in-home personal care services such as
home health aides, personal care services, therapies,
and nursing services.
The Health Insurance Portability and Account-
ability Act of 1996 included tax incentives for the
purchase of LTC insurance. More recently, the Presi-
dent recommended that a new LTC insurance pro-
gram be established for federal employees and that a
tax credit of up to $1,000 per year be available to
those caring for disabled relatives.
Prior to 1985, the private LTC insurance market
barely existed. By the end of 1999 it is estimated that
more than 6 million LTC policies will have been
sold, and in-force premiums will exceed $4 billion
(Health Insurance Association of America [HIAA],
1998; National Institute for Health Care Manage-
ment, 1999). It is likely that the LTC insurance mar-
ket will continue to expand. This is because of the in-
crease in the number of employers as well as insurers
entering the market and the increasing interest among
younger elders (HIAA, 2000).
There is a body of knowledge about who buys
policies and what motivates them to do so (American
Council of Life Insurers, 2000; HIAA, 2000), but
there has been no systematic study of individuals
who are receiving benefits under private LTC insur-
ance policies. An understanding of claimants and
their behavior should help consumers make more in-
formed choices about financing their potential LTC
needs, help the private insurance industry better meet
those needs, and inform public policies designed to
support and regulate the market.
The purpose of this study is to provide basic de-
scriptive information on community-dwelling, dis-
abled, private LTC insurance policyholders who have
accessed policy benefits. We provide information on
the sociodemographic and service utilization profile
of these claimants and characterize the level and mix
of informal and formal support. We address the im-
plications of the receipt of LTC insurance benefits for
use of formal and informal caregiving, the amount of
care received, the impact of insurance benefits on the
disabled as well as on those caring for disabled elders,
and the impact on choices about where care is re-
ceived. Finally, we summarize claimants’ reported
level of satisfaction with their LTC insurance policy
and the company providing it. We conclude with a
discussion of the implications of the findings.
G.E. Capital Assurance Company, John Hancock Fi-
nancial Services, and UnumProvident. These compa-
nies also represent diverse market segments and pol-
icy designs, and employ differing underwriting and
claims management strategies. Companies were in-
structed to take a random sample of “open claims”
for individuals aged 65 and over who had policies
that covered both nursing home and home health
care services. The definition of an open claim was
one for which at least one claims payment had been
made and there had been no notification of the claim
ceasing. All claims were ongoing or “active.”
Claimants from seven companies had reimburse-
ment policies that paid expenses up to a daily maxi-
mum amount, whereas claimants from one company
had policies that paid cash benefits that could be
used in any way deemed appropriate by the claimant.
For the most part, eligibility for benefits was based
on limitations in activities of daily living (ADLs), the
presence of cognitive impairment, and, in some cases,
medical necessity as determined by a physician.
A trained nurse or social worker interviewed each
claimant in his or her home. Each interviewer under-
went comprehensive training to assure interrater reli-
ability. The vast majority of questions were closed,
but the claimant did have the opportunity to respond
to a number of open questions. Information garnered
from these interviews was then linked to policy de-
sign and claim information generated from the ad-
ministrative systems of the participating insurance
companies. If the claimant was cognitively impaired,
then a proxy, identified by insurance company records
or by the researchers upon initial contact, was inter-
viewed. Designated contacts were asked who had the
most knowledge about the claimant’s health and ac-
tivities. Typically these proxies were the primary in-
formal caregivers of the insured claimants.
During the interview, claimants or proxies were
asked to identify their primary informal caregiver,
that is, the person who regularly helped them the
most with their everyday activities but did not re-
ceive monetary payment. The percentage of claim-
ants with at least one informal caregiver was 77%. A
separate telephone interview conducted with 424 of
those informal caregivers had a 91% response rate.
All fieldwork was completed by February 1999.
The interviewer collected information on (a) the
functional, cognitive, and medical status of the
claimant; (b) the level and types of assistance re-
ceived from paid and family caregivers; (c) the fam-
ily’s interaction with the insurance company and the
service system; and (d) basic sociodemographic infor-
mation such as living arrangement, marital status,
and income level. The administrative data provided
from the insurance company had detailed policy de-
sign information as well as claims payments history.
Methods
Data were obtained from a nationally representa-
tive sample of 693 LTC insurance claimants who
were receiving benefits while living in the community
(a response rate of 82%). Eight of the largest LTC in-
surance companies who represent about 80% of the
private LTC policies sold today and the vast majority
of claims activity provided the sample of claimants.
Companies that participated in the study included
Aegon Companies, Bankers Life and Casualty, Con-
seco Senior Health, CNA, Fortis Long-Term Care,
Results
Profiling Privately Insured Claimants
Table 1 compares the demographic profile of pri-
vately insured claimants with a sample of privately
Vol. 41, No. 2, 2001
181

Table 1. Sociodemographic Characteristics of Privately Insured Home Care Claimants and All Elders Aged 65 and Over, in Percentages
All Privately Insured
Home Care Claimants
(n ϭ 686)
LTC Insurance
Policyholdersa
(n ϭ 1206)
All Elders Aged
65 and Overb,c
Sociodemographic Characteristics
Average Age
65–69
70–74
75–79
79 years
5%
18
68 years
75 years
32%
23
40%
29
19
9
28
28
19
15
80–84
85ϩ
21
3
11
Gender
Male
Female
32
68
39
61
31
69
Marital Status
Never married
Married
Divorced/separated
Widowed
4
46
5
6
62
6
4
55
7
45
27
34
Any Children Within 25 Miles
Yes
No
54
46
61
39
69
31
Education Level
Less than high school graduate
High school graduate
Technical/trade/business/some college
College graduate
Race
10
25
28
37
7
28
29
36
33d
35
17
15
White (not Hispanic)
Non-White
97
3
98
2
85
15
Living Arrangement
Alone
With spouse
With relative
Other
34
44
11
11
Not Available
34
53
13
—
Total Income
Յ$30,000
Ͼ$30,000
52
48
55
45
65
35
Total Income (Detailed)
Less than $10,500
$10,501–$19,999
$20,000–$30,000
$30,001–$39,999
$40,000–$49,999
$50,000–$74,999
Ն$75,000
7
22
28
13
9
11
10
6
20
29
20
9
10
6
19e
28
19
11
8
8
8
Estimated Current Value of Home
Less than $50,000
$50,000–$99,999
$100,000–$149,999
$150,000–$199,999
$200,000–$249,999
Ն$250,000
7
28
19
13
11
22
25f
37
18
10
4
Not Available
7
aCohen & Kumar (1997).
bAdministration on Aging (1998).
cLifePlans, Inc. analysis of 1995 survey of 1,000 randomly selected individuals aged 65 and over.
dU.S. Census Bureau (1999).
eU.S. Census Bureau (1998). Note that among claimants, 15% of the respondents who were willing to indicate whether their income
was greater or less than $30,000 were not willing to answer the more detailed income question. That is why there is a difference between
the estimate for the proportion reporting incomes less than or equal to $30,000 (52%) and the estimate derived when summing answers
for those answering the detailed income question.
fU.S. Census Bureau (1997).
insured nonclaimants and with a sample of elders age
65 and over.
In general, privately insured claimants are more
likely to be older, widowed, and more frequently
White than are elders in the general population. They
are also less likely to have children living nearby.
Long-term care insurance claimants are wealthier
than their counterparts in the general population;
they are 1.4 times more likely to have incomes greater
than $30,000 than are elders in the general popula-
tion. They also have significantly greater housing as-
sets. Compared to other policyholders, claimants are
older, more often female, less likely to be married,
and are also less likely to have children living nearby.
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Currently, most available LTC policies require
that an individual have at least two limitations out of
six common ADLs or be cognitively impaired in or-
der to qualify for benefits. All tax-qualified policies
have such a requirement. Older and nontax-qualified
policies do, however, enable an individual to access
benefits if LTC services are deemed by a physician to
be medically necessary. Most claimants (79%) have
two or more ADL limitations. The mean number of
ADL limitations is 3.3. We defined a person as lim-
ited if they required any of the following levels of as-
sistance for a particular ADL: (a) Cueing assistance,
requiring a person to be prompted to do an activity,
but no physical intervention; (b) stand-by assistance,
requiring a person to be nearby in case help is
needed; and (c) physical “hands-on” assistance.
The cognitive status of claimants was determined
either by a diagnosis of Alzheimer’s disease or other
dementia (3%) or by having four or more errors on
the Short Portable Mental Status Questionnaire
(29%). Thus, 32% of claimants are cognitively im-
paired. Taken together, these findings suggest that
85% of claimants have at least two ADL limitations
or are cognitively impaired; the others are either qual-
ifying for benefits through a medical necessity benefit
trigger or they are receiving benefits even though they
may not be meeting benefit triggers as specified in the
insurance contract at the time of the interview.
shows that, on average, these claimants receive 59
hours of personal care a week (roughly 8 hours per
day), over half of which is devoted to IADL assis-
tance. Not shown in the figure is the fact that pri-
vately insured disabled elders receive more weekly
care (formal and informal together) than do similarly
disabled nonprivately insured elders (Robert Wood
Johnson Foundation & Department of Health and
Human Services [DHHS], 1999). Thus, any reduc-
tions in the level of informal caregiving brought
about by the presence of insurance-financed care are
more than offset by increases in formal care.
Formal and informal caregivers provide different
degrees of assistance. Formal caregivers split their as-
sistance fairly evenly between ADL and IADL activi-
ties. Informal caregivers generally provide greater
amounts of IADL assistance (14 hours per week)
than ADL assistance (9 hours per week). It should be
noted that the averages for care are pushed up by the
fact that roughly 10% of the sample receives round-
the-clock care—24 hours per day, 7 days a week—
most of it standby assistance.
Much of the cost of formal care is paid for by insur-
ance benefits. In fact, insurance pays all of the costs of
care for more than 70% of claimants. The average
monthly insurance benefit paid to claimants is $1,527.
(These data were obtained from the administrative
claims systems from each of the insurance companies.)
How does this compare to the primary public payer of
home- and community-based care for disabled el-
ders—the Medicaid waiver program? The Medicaid
waiver program pays an average of about $485 per
month for care (Ladd, Kane, & Kane, 1999).
Formal and Informal Care Services Among Privately
Insured Claimants
It is well known that most long-term care is provided
informally by family members, typically spouses,
daughters, and daughters-in-laws (National Alliance
for Caregiving, 1998; Penrod, Kane, Kane, & Finch,
1995; Tennstedt, 1999). Table 1 revealed that many
privately insured claimants live alone and do not
have children living nearby. For those without infor-
mal caregivers, the LTC policy should facilitate use
of formal (paid) support. For those with informal
supports, the policy may enable them to decrease re-
liance on such support—an important motivator for
initial purchase (Cohen & Kumar, 1997). Most
claimants (77%) rely on a combination of formal
(paid) and informal (unpaid) care, but 23% rely
solely on formal (paid) services for their care. In con-
trast, among disabled noninsured elders, only about
4% rely exclusively on formal care (Jackson & Doty,
1999). Thus, privately insured disabled claimants are
about six times more likely to rely exclusively on for-
mal care than are nonprivately insured disabled el-
ders living in the community. Home health aides pro-
vide most of the formal care given to claimants; two
in three claimants receive care from this type of ser-
vice provider. Less than 10% of claimants rely on
skilled nurses for home care services. This represents
a significantly lower usage than is observed in the dis-
abled Medicare population (Jackson & Doty, 1999).
In order to continue living independently in the
community, claimants also need assistance with in-
strumental activities of daily living (IADLs). Figure 1
Impact of Private LTC Insurance on Claimants and
Informal Caregivers
Claimants and informal caregivers were asked
how having an LTC insurance policy has influenced
the level and type of care received (by claimants) and
provided (by informal caregivers). For claimants, the
greatest impact of insurance benefits is on their level
of paid care. To measure this, we asked claimants,
“In the absence of the policy, would you be able to
afford the amount of care that you currently re-
ceive?” as well as, “In the absence of your policy,
would you receive fewer hours of paid care?” Only
40% indicated that they would be able to afford
their current level of services, and some 57% re-
Figure 1. Average weekly hours of informal and formal care.
Source: 1999 National Claimant Study (n ϭ 692).
Vol. 41, No. 2, 2001
183

sponded that they would have to consume fewer
hours of paid care. This implies that an absence of
insurance would be associated with more unmet or
undermet need. How would such needs be fulfilled?
Claimants were asked, “In the absence of your pol-
icy, would you have to rely more on family, friends,
or other volunteers to provide assistance?” Fifty-four
percent indicated that they would have to rely more
on informal supports. It is unclear from these data
alone whether such informal supports would be able
to compensate for the loss associated with lower lev-
els of formal (paid) care.
care. This could reflect deterioration in the claim-
ant’s condition since the onset of benefit payments,
meaning that the informal caregiver has had to in-
crease the amount of care provided. It may also be
that the presence of formal caregivers has simply en-
couraged informal caregivers to provide more but
perhaps different care. Thus, in some instances, for-
mal care may be a complementary rather than substi-
tute service for informal caregiving. With respect to
the third question, most caregivers (72%) indicate
that they have not changed the nature of the care
that they provide. For the remaining 28%, most
show reductions in ADL and IADL assistance and an
increase in companionship services.
We asked a similar, although more detailed, set of
questions to informal caregivers.
Informal caregiving can be very stressful (National
Alliance for Caregiving, 1998). Informal caregivers
were asked whether the level of stress has changed
since the person they care for began receiving insur-
ance benefits. Most (68%) reported that their level of
stress had decreased (see Figure 3). This is consistent
with the belief that an increase in formal care relieves
the family member or friend of the responsibilities of
managing and providing care. Even so, other factors
unrelated to the presence of insurance-financed bene-
fits also likely affect stress levels.
The entry of formal caregivers could lead to con-
gestion and confusion in service provision. The need
to monitor formal caregivers or to interact with the
insurer as well as with providers might have led to
increased stress for informal caregivers. Such is not
the case. Only 4% of informal caregivers indicate
that the presence of insurance increased stress levels.
One quarter of informal caregivers indicate that the
presence of insurance-financed formal services had
no effect on their stress level.
Given the fact that both the formal and informal
care networks are providing significant amounts of
care to disabled claimants, a key question emerges:
Are the care needs of claimants being adequately ad-
dressed? We focus on whether or not certain needs are
being undermet. An undermet need is present when a
claimant receives assistance performing a particular
activity but indicates that they could use more help or
believes that they had to wait too long to receive the
help. The presence of an undermet need could reflect
the fact that caregivers are not available in a timely
1. Do they provide more, less, or the same amount
of care now that insurance benefits are being paid
to the claimant than when they first began caring?
2. In the absence of the claimant’s policy would they
provide more, less, or the same amount of care as
they currently provide?
3. In the presence of policy benefits, has the nature
of the care they provide changed and if so, how?
Figure 2 shows that roughly two in three informal
caregivers have not reduced the level of care that they
provide since insurance benefits started. In fact, half of
the caregivers report no change in the amount of care
they provide. This suggests that formal care is cer-
tainly not a perfect substitute for informal care, a find-
ing consistent with research on the interaction be-
tween formal and informal caregiving in the context
of public programs (Hanley, Wiener, & Harris, 1991;
Jackson, 1997; Tennstedt, Crawford, & McKinlay,
1993; Yordi et al., 1997). Still, about one in three in-
formal caregivers did indicate that they now provide
less informal care. As for the caregivers, a slight ma-
jority (52%) indicated that if the policy were not pay-
ing benefits they would increase the level of care that
they provide. These findings are consistent with recent
studies showing that formal services are generally used
in conjunction with informal care, and secondary to
it; substitution of formal services for informal care is
limited and temporary (Robert Wood Johnson Foun-
dation & DHHS, 1999; Tennstedt, 1999).
It is noteworthy that 15% of informal caregivers
provide more informal care following the commence-
ment of insurance benefits and the increase of formal
Figure 2. Informal caregivers’ perceptions about impact of
claimants’ policy. Source: Analysis of 1998 informal caregiver
data (n ϭ 415 informal caregivers).
Figure 3. Caregivers’ assessment as to whether presence of in-
surance benefits has reduced stress. Source: Analysis of 1998 in-
formal caregiver data (n ϭ 416 informal caregivers).
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The Gerontologist

manner; or, it could result from scheduling difficulties
or because, once in the home, caregivers are not pro-
viding care when needed. Additionally, it may be that
caregivers do not provide an adequate level of care ei-
ther because of quality or coordination issues.
Approximately half of both claimants and infor-
mal caregivers responded that in the absence of the
insurance-financed services, they would have to seek
institutional alternatives. An important matter is
whether there is agreement about institutional alter-
natives between the claimant and her/his informal
caregiver. In 31% of the cases where we had responses
from both claimant and caregiver, they agreed that
institutional alternatives would be needed in the ab-
sence of an LTC policy. In 18% of the cases the in-
formal caregiver felt that the claimant would need in-
stitutional care and the claimant disagreed, whereas
in 9% the claimant felt she/he would need institu-
tional care and the informal caregiver disagreed.
Thus, it appears that between one third and one half
of disabled policyholders believe that they would not
be able to remain in their homes without their insur-
ance-financed formal care services. Although a stated
intention to seek institutional care does not always
translate into a particular behavior, it is reasonable
to assume that given their level of disability, a num-
ber of these individuals would qualify and be appro-
priate candidates for certain institutional settings.
While supply constraints may impede their access to
such care, many believe that without their home care
benefits, they would need to consider this.
In total, 23% of claimants report at least one under-
met need. Individuals who receive more hours of ADL
assistance are also more likely to report greater under-
met need. This is particularly true for individuals who
rely more on informal rather than formal caregivers.
This suggests that when multiple caregivers are in-
volved in the care of an individual, clearly delineated
lines of responsibility may be particularly important in
assuring that needs are met. One implication of these
findings is that training informal caregivers may better
prepare them to respond to the multiple needs of their
disabled care receivers. Bathing was the ADL with the
highest level of reported undermet need. This is not
surprising, given the complexity of the activity and the
greater chance for mismatch between service schedules
and claimant preferences. Those most likely to report
undermet needs are unmarried women and individuals
with multiple caregivers.
Clearly, long-term care insurance is succeeding in
bringing formal caregivers into the homes of disabled
elders, many of whom rely solely on the insurance to
provide access to care. Yet problems with service
availability, scheduling, continuity and coordination
of caregivers, claimant preference, and the quality of
caregivers all contribute to a sizable minority report-
ing undermet needs.
Among claimants who thought that they could not
remain in the community without their insurance
benefits, roughly half said they would need to enter a
nursing home and half indicated they would move to
an assisted living facility.
A great deal of research has focused on whether
the use of formal home care services delays or elimi-
nates the use of costly institutional care such as nurs-
ing home care (Garber and McCurdy, 1989; Greene,
Lovely, & Ondrich, 1993: Kane, 1998; Shapiro &
Tate, 1988; Weissert, Cready & Pawelak, 1988;
Weissert & Hedrick, 1994; Wolf, 1997). Most of
this research suggests that, unless very carefully tar-
geted, home care rarely prevents someone from using
nursing home care. There is a growing consensus
that home care serves a distinct population that dif-
fers in relevant respects from the nursing home popu-
lation. Still, the decision to seek institutional care is
complicated; it involves a myriad of factors, many of
which cannot be adequately captured even by the
most sophisticated multivariate modeling.
Claimant Satisfaction
Claimants were asked a series of questions related
to general satisfaction with their insurance policy.
Figure 5 shows that the vast majority of claimants
(86%) are satisfied with their policy; slightly less
than two in three are very satisfied with their policy.
Despite reported high levels of satisfaction, about
one third of claimants felt that they had not pur-
chased enough home care benefits. Given that most
policies cover 3 to 4 years of care, and the average
claimant has been receiving benefits for slightly more
than a year, this deficiency is related to the daily ben-
efit amount chosen at the time of purchase. Although
this does not represent an inherent flaw in insurance
policy design, it does suggest that these claimants
We elected to address this important issue directly.
Claimants and informal caregivers were asked whether
the disabled claimant would be able to remain in the
home if there were no LTC insurance policy to fi-
nance formal care. More specifically, claimants were
asked, “If your long-term care policy was not paying
for home care services, do you think you would be
able to remain in your home or would you have to
move to an institutional setting like an assisted living
facility or a nursing home?” Their primary informal
caregivers were asked, “If home care services were
not covered by the care receiver’s LTC insurance pol-
icy, do you think he/she would need to seek institu-
tional care such as nursing home care or assisted liv-
ing?” Figure 4 summarizes results.
Figure 4. In absence of policy would institutional care be
sought? Source: Analysis of 1998 claimant and informal caregiver
data (n ϭ 643 claimants; n ϭ 416 informal caregivers).
Vol. 41, No. 2, 2001
185

status of elders can and does change rapidly (Man-
ton, Corder, & Stallard, 1997). However, the cross-
sectional nature of the study design does not enable
us to adequately capture such changes over time.
Thus, while we can estimate the prevalence of dis-
ability at a point in time, it is quite possible that had
interviews been conducted at another point, these es-
timates would have differed.
Finally, although the sample of claimants was
drawn to be representative, it does represent the first
major wave of claimants. Most sales of LTC insur-
ance policies have occurred in the last 5 years, and
these new policyholders are not likely to make claims
for 5 to 10 years into the future. Patterns of service
use, interactions with insurers, and the extent of un-
dermet need and satisfaction levels may vary greatly
as insurers and providers are faced with a much
larger pool of claimants. Findings here are applicable
to this first, relatively smaller, wave of claimants.
Figure 5. Level of satisfaction with long-term care insurance
policy.
may not have had enough information on the actual
costs of care that they might incur. (The issue is not
related to affordability. Income level was not related
to whether or not claimants felt that they had pur-
chased enough home care coverage.) This finding
may also be a response to the actual effect of volun-
tary coinsurance: When people are actually faced
with paying it, they don’t like it. The implication is
that additional consumer education is needed to as-
sure that at the time of purchase, individuals have an
understanding of the relationship between benefit
amounts and costs of care.
Most claimants (70%) found the claims filing pro-
cess to be easy, and 90% of all individuals filing claims
had either no disagreements with their insurance com-
panies or had a disagreement(s) that was resolved satis-
factorily. About 10% of claimants felt their disagree-
ment was not resolved satisfactorily. Claimants were
also asked a question about actions that their insur-
ance company might have taken, but didn’t, to help
them when they needed benefits. This was an open-
ended question. While about three in four respondents
felt there was nothing else that the insurance company
should have done, many of the remaining respondents
felt that the company could have provided additional
customer support, improved claims processing, and
given more advice about the policy itself. It is notewor-
thy that claimants with cash disability policies did ex-
press the highest level of satisfaction regarding their in-
teractions with the insurance companies.
Summary and Implications
Individuals with LTC insurance receive substantial
amounts of standby ADL and IADL assistance, typi-
cally more than what is received by similarly disabled
nonprivately insured elders (Robert Wood Johnson
Foundation & DHHS, 1999). Also, the insurance
benefits are targeted on individuals with significant
ADL dependencies and/or cognitive impairments, as
well as on individuals who appear to be on a down-
ward path toward greater disability. For many, in
conjunction with the informal care that they receive,
the ability to access formal care services through
their LTC policy helps them to continue living inde-
pendently in their homes. A large number of claim-
ants (one fourth) have no available informal support
services. As for claimants with informal supports, the
availability of insurance benefits has not led to a
“breakdown” in informal caregiving by primary care-
givers. Rather, most primary informal caregivers
have at least sustained the amount of care they pro-
vide to their disabled relatives. Taken together, these
observations suggest that formal care may substitute
for some, but not most, informal care, and that the
two systems appear to be working in tandem to meet
the LTC needs of claimants.
Findings suggest that while adequate financing of
care is a necessary condition for meeting the needs of
insured and disabled elders, it is clearly not sufficient.
Close cooperation and coordination with the service
delivery network is critically important. This holds
true for individuals being cared for in institutional set-
tings as well. In such settings, issues related to the qual-
ity and training of staff, the amount of staff oversight,
and staff ratios will determine whether claimants feel
that their needs are being adequately addressed.
Discussion
Study Limitations
This research provides much needed information
on a topic that has had little focus to date, but a
number of limitations should be noted. First, because
roughly one in three claimants was cognitively im-
paired, we needed to conduct interviews with prox-
ies. The vast majority of these interviews were con-
ducted with spouses and adult children, most often
identified as the primary informal caregiver of the in-
sured claimant. These proxies’ responses to certain
questions related to satisfaction, undermet need, and
even to the amount of care provided may differ from
the views of the claimants themselves. Second, it is
important to note that the functional and cognitive
Most claimants feel that they are receiving signifi-
cant benefits from their LTC policy and that it is do-
ing what it is supposed to do, namely, helping to
bring paid caregivers into the home or accessing the
institutional care that they need. What they believe
they need is somewhat better servicing of their claim
186
The Gerontologist

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Received August 10, 2000
Accepted December 11, 2000
Decision Editor: Laurence G. Branch, PhD
Vol. 41, No. 2, 2001
187